JUDGMENTBY: SHANKAR J

This judgment concerns the extent to which guarantors can successfully ward off claims from creditors merely because they have not first been served by the creditors with a written demand for the precise amount claimed to be owing before the action was filed. It also deals with some other issues which may arise when such a defence is taken.

The facts are simple enough. The plaintiffs are bankers. Feng Sheng (M) Sdn Bhd (Feng Sheng) was a company dealing, inter alia, with the import of Italian tiles and its resale on the local market. It looked to the plaintiffs for finance. The defendants in this action were each directors of Feng Sheng.

Before April 1983 the plaintiffs had granted Feng Sheng a trust receipt facility of $ 50,000, a letter of credit facility of $ 60,000, and a shipping guarantee facility of $ 30,000, making a total facility of $ 140,000.

Feng Sheng obviously decided to expand its business and on 16 March 1983 all the three defendants signed a written letter of guarantee (the first guarantee) to cover the indebtedness of Feng Sheng to the extent of $ 500,000. This guarantee is a formal document printed on the plaintiffs notepaper. It is st